August 17, 2006

Cable News: A Maturing Platform with an Uncertain Future

Industry leaders discuss what lies ahead for cable news

FigureAlthough still quite young, (CNN, the granddaddy of the group, is just 26 years old) cable news is no longer the new kid on the information-delivery block, but rather a rapidly maturing medium whose overall audience appears to be leveling off.

Nielsen Media numbers indicate that ratings for all three cable news channels remained steady for the first half of the year. And a new media consumption survey by the Pew Research Center for the People & the Press found that the percentage of adults who say they regularly watch cable news dropped from 38% in 2004 — a national election year — to 34% this year. In another sign of potential trouble for cable news outlets — which generally benefit from major news events — the current Middle East crisis hasn’t generated noticeable spikes in their primetime audiences.

Still in the heated cable news ratings wars, the big winner continues to be the Fox News Channel, which generates more primetime viewers than CNN and MSNBC combined.

In our sixth roundtable, part of PEJ’s series of nine roundtables with industry experts on the future of the news media, experts on Cable TV news share their thoughts on the direction of the industry. And there is disagreement about that future. While some of our analysts say the industry is poised to adapt to the changing news consumer, others seem convinced that dramatic innovations are necessary.

The panelists for this roundtable were:

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  • Rick Kaplan, former President and General Manager, MSNBC
  • George Niesen, VP & Managing Editor, Kagan Research (an independent media research firm that provides economic, financial and technical analysis for the media & communications industries).
  • David Payne, Senior VP, CNN News Services & General Manager, CNN.com
  • Judy Woodruff, Special Correspondent for MacNeil/Lehrer Productions

Note: Fox News declined to participate in the discussion

Read the full transcript


If there were one thing you could change about the cable TV news industry, what would it be?

Rick Kaplan: If there was one thing I could do, I would like to give everyone a “patience pill.” In a perfect world, you could just take a program and work with the program, make it better, make it deeper and make it smarter, and when those things get done and it’s on the air, you should be allowed the patience to stick with it. “60 Minutes,” for example, took five or six years to gain a significant audience.

Judy Woodruff: [I would change] three things. One, that we find a new business model — whatever it is — quickly, so that there is a steady stream of revenue to pay for high quality journalism that thousands of journalists are capable of delivering. Two, that owners and shareholders of media companies value the public trust as much as the bottom line. And three, a non-profit model with robust support from the public, such as public broadcasting, but far better funded!

George Niesen: I see one overriding issue with news coverage today. It’s “get the whole story.” Unfortunately (and intentions aside) that’s impossible with instant journalism. Even more unfortunately, the responsibility for “getting the whole story” has devolved from the journalist to the consumer. And most unfortunately, few consumers have the time/resources/inclination to put together the whole story.

The good news is that great journalism is alive and well — even thriving — but one generally has to search alternative media to find it.

We need to adapt to, and make efficient and effective use of, new delivery methods. Technological change will only become faster and more inevitable. Consumers will want their news immediately. They will also (or at least should) want more depth. Effective media reach will come via directed, semi-push methods of news delivery — RSS is a potential example — that will provide the updates, the analysis and the varied viewpoints in-depth reporting requires. It’s about reporters staying on task and the delivery mechanisms ensuring the consumer sees that and receives the results of it.

Will the audience for cable news continue to grow or do you think it is hitting a ceiling as penetration growth ends? If it has peaked, what should the news channels do?

Rick Kaplan: Cable is the ultimate reality show and as long as it stays compelling, interesting and useful as can be, the audience will continue to grow. It’s ludicrous to think that during a day there are only a million people available to watch cable news, when there are 80 million people available to watch cable. It goes back to my first point that if news outlets don’t start digging down and giving people the information that truly is news, they won’t grow. It requires considering what the audiences need, what they are able to get, what you are able to provide and you can’t play the lowest common denominator in this because it’s not going to satisfy.

David Payne: Especially since September 11, there has been a consistent and continual increase in news viewing on cable versus broadcast channels. We see enormous potential for cable news share to continue to increase, and we expect that trend to carry on.

George Niesen: Let’s face it, cable is a mature industry. Add DBS and broadband delivery is pretty static. Cable news channels need to create and adapt to a static but profitable business model, rather than a growth model.

One broad trend we sense in the media culture is the paradox of more outlets covering fewer stories. As the audiences for particular news outlets shrink, newsroom resources are then reduced, but these outlets still feel compelled to cover the big events of the day. The result is more outlets covering those same “big” events and fewer are covering much beyond that as much as they once did. How do you view this trend?

George Niesen: I see the trend as not much of an issue in the medium-to-long term, as even more outlets (to include alternative media and even individuals) cover even more stories. The media conglomerates, to survive, will have to fragment themselves to serve an ever-increasing number of niches and they’ll have to revise their business models appropriately. On big stories the key will be cooperation rather than competition, as any number of niche providers will have to come together to deal with them.

Judy Woodruff: I see fewer journalists and shrinking budgets, [but] at the same time there is a rising demand for “high impact” news stories that will “grab” the attention of the audience. This is disturbing because it means many important stories — that take digging and explanation — are overlooked, while the “obvious” stories, whether from the White House or Hollywood, get huge coverage.

Rick Kaplan: The problem isn’t that it’s too many covering too few events. The problem is that news audiences today come to the television set knowing so much more than they did in years past, that you have to go deeper in order to remain compelling. In the old days when Walter Cronkite or Peter Jennings or Tom Brokaw or Dan Rather came on the air, whatever they said after “good evening” was usually news to people. Now, it’s like ‘I know Martha Stewart was convicted, I know there were demonstrations for immigration… I know these stories’. You need to get deeper, you need to get more facets out of a story — that’s what they’re not doing.

David Payne: Audiences for news are not shrinking; they’re just migrating into different usage patterns. So while you see, for example, lower subscribers for print news, that audience is not “going away” per se, it’s just moving to digital platforms, where the growth and upside potential are virtually unlimited. Every local newspaper, for example, now has the potential to be a truly global medium. The trick is getting the right resources in the right places to capture what is, in fact, a larger audience for news than ever before.

How big of a threat is online news to the cable news channels? Some have argued that the Internet can offer the immediacy of cable without all the repetition, which means cable could suffer substantially. How will they compare with older media, such as networks and newspaper?

David Payne: The online divisions of cable news and other media organizations should be completely complementary to their parents. At CNN, online news isn’t viewed as a threat — it’s an extraordinary opportunity to reach a larger audience — particularly an at-work audience — that gives us more reach, more depth and more sales.

Rick Kaplan: I don’t think online news is a threat. Where it is all moving is some kind of visual model in which streaming video and all the rest is married to what you can do in writing. You will be able to accomplish both simultaneously. I think this convergence, in the end, is massive, and I don’t think there will be a computer screen or television screen like we have now. I think there will be one screen that combines them both. Again, I don’t think it’s a threat unless you want to stand back and not change anything. That would be a threat to your survival.

Judy Woodruff: Online news is already a threat to cable channels and other outlets. Many young people — and even some older ones! — already turn to the internet for news. The interesting question is will they turn to established sites, like The New York Times and NBC news, or will they turn to Yahoo and Google, for a compilation of stories, and eventually, perhaps, their own reporting (as Yahoo is already doing with Kevin Sites.)

George Niesen: Of course, cable is threatened by the Internet, as it should be. Cable news organizations will have to compete on the same playing field — with instant video and audio — as networks and newspapers (and Internet content aggregators). News by appointment (10 pm) is becoming increasingly irrelevant. In the mid-term future, breaking news will be much better served by alternative delivery methods than by cable.

The critical factor is follow-up and depth — not something either network or cable TV news has ever been noted for anyway. The Net is a huge threat in that it will be able to provide the news people want when and where they want it and with the depth of coverage they want. Cable news, in the vanguard twenty years ago, may now be bringing up the rear.

One final note — one major unconsidered factor here is regulation and legislation and the effect that will have on media and new media especially. Broadcast TV is heavily regulated vs. cable. Old media would like to see new media comparably regulated. New media wants a free hand. Throw in politics and the mix may get interesting over time.

How much confidence do you have that traditional mainstream media organizations in general will survive and thrive in the transition to the Internet?

Judy Woodruff: I wish I had more. It depends on how agile and innovative they are as this transition takes place. If they can transform themselves into multi-media, multi-tasking news gathering machines, and find a business model that permits them to make a healthy return – then they can survive. But this is no simple trick.

Rick Kaplan: I have total confidence that they will survive. No matter what happens in the future it’s the major media outlets that have the content, the libraries and the structure and, they’re smart — they won’t sit still. It’s narrow-minded and just plain short sighted to think that mainstream media organizations are not going to evolve and that they’re not going to develop.

David Payne: [Do] you remember Morgan’s Freeman quote in “The Shawshank Redemption”? “You have to get busy living or get busy dying.” Many mainstream media organizations are at a crossroads. The organizations that will thrive and win are those that follow and program for their audiences on the relevant platforms; provide trust and verification in an era of fragmentation and noise; and leverage their powerful newsgathering infrastructures to meet the new consumers’ needs. CNN.com would not exist but for CNN’s global newsgathering operation.

George Niesen: Money talks, and mainstream media conglomerates are at least resourceful, if not particularly agile. They’ll find a way to maintain their relevance.